Richard Byles, co-chairman of the Economic Programme Oversight Committee (EPOC), said it would be catastrophic if Jamaica were to default on its debt.

"It is one thing for a big country like Argentina with a big economy to default - and they are going to pay a heavy price if they don't step back - but they have a big internal economy which keeps things ticking over a little bit better than us. We are so small and we are so exposed to the global world in everything that we do, so it would be calamity [if we were to default]," Byles lamented.

"Every foreign investor would be deeply concerned, because what you would have done is broken the golden rule. Every investor would say this is a crazy country, let us stay away from this country. Nobody would lend you any money; soon you wouldn't be able to import the necessities of life. You wouldn't have any oil to run cars, [there would be] power cuts, and people without work. People would take their money and leave the country. It would be absolute chaos," he added.

Jamaica was recently placed in unfavourable company after being listed among 11 countries at risk of defaulting on loans received from the international bond market, according to an article titled 'Not just Argentina: 11 countries near bankruptcy', posted on USA Today's website recently. The August 1 story attributes Jamaica's predicament to the high interest rate the country has paid on monies borrowed.

JA'S CREDIT RATING

Jamaica's credit rating currently stands at Caa3, according to rating agency Moody's. The rating means the country is a 'very high credit risk'. The ratings agency puts the Government's debt (percentage of GDP) at 133.7 per cent, and GDP per capita at US$9,256.

"Borrowing funds in the international bond market can be quite expensive for countries with poor credit ratings. Countries have to pay high interest rates on their debt because investors require greater returns on what they perceive to be riskier investments," the article reads. "For example, a 10-year US Treasury note pays an annual coupon of just 2.5 per cent. By contrast, a comparable bond recently issued by Jamaica pays out 7.65 per cent a year. In Greece, yields on 10-year government bonds reached 29 per cent in early 2012, right before the country defaulted."

But Minister of Finance Dr Peter Phillips, though declining to comment on the article, dismissed the notion of the country defaulting.

"What I can say definitively is this: We have a programme of debt reduction supported by the International Monetary Fund (IMF)," Phillips highlighted. "There is no risk of default in our programme and we are very confident. We have performed well under the programme."

However, Opposition Spokesman on Finance Audley Shaw contested that "when a country is as heavily indebted as Jamaica is, you are at risk for default".

"At risk for default; yes, I think it is a fair assessment, because we are also incidentally ranked among the top five most heavily indebted countries in the world, so I am not surprised at all," Shaw said.

Shaw highlighted that the two national debt exchange programmes undertaken in 2010 and 2013 were viewed by some as the country having defaulted.

"When we had the debt exchange during my time and the subsequent national debt exchange under the present government, and when it was initially announced, it was considered by some people to be a kind of default. But once it was reorganised, then it was taken out of that category," Shaw shared.

According to the Auditor General's Report on the 2014/2015 Fiscal Policy Paper, the stock of Jamaica's public debt is budgeted to reach J$2 trillion this fiscal year, an increase of 7.4 per cent when compared to the last fiscal year. The projected total debt comprises domestic debt of J$1.1 trillion and external debt of J$993.9 billion.

While acknowledging that the country is heavily indebted, Phillips believes the record subscriptions of US$800m that were raised in the international bond market last month at a coupon rate of 7.625 per cent shows global trust in the country's economic reform programme.

"We have a debt which, I admit, is a very high debt," Phillips admitted. "We have secured recently a bond with the lowest interest rate ever, which demonstrates that the international bond market has confidence in our programme of economic reform."